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UK EAT rules Asda can vary employment contracts unilaterally

DATE: 24.06.2011

 

The Employment Appeals Tribunal (EAT) in the UK, upheld the Employment Tribunal's decision in Bateman and others v Asda Stores Ltd ruling that Asda could rely on a clause in its staff handbook which reserved the right to amend various contractual terms unilaterally, including those relating to pay.

Asda employs thousands of staff, some of whom were paid under an old pay regime known as the "Standard Rate" whilst others were employed under the new regime, known as "Top Rate". Asda sought to harmonise the pay structure by placing all staff on the newer "Top Rate" pay structure. Whilst Asda sought to ensure that no employees would suffer a reduction in pay as a result of the harmonisation, not all employees were keen to accept the change to their terms and conditions.

Despite the express right to amend employee’s contracts of employment unilaterally, Asda conducted an extensive consultation process informing employees of this change. Whilst many employees agreed to Asda's proposed amendment, approximately 8,700 employees' contracts were varied without their express consent and 700 of employees brought claims.

The Tribunal held that the handbook enabled Asda to amend employees' terms unilaterally without the need for any additional express consent. The EAT dismissed the employees’ appeal as it concluded Asda's handbook should be construed objectively and found no evidence to support the Claimants' contention that they never intended or expected to be bound by such a provision.

Employers should not view this decision as a carte blanche for relying on those ubiquitous clauses which seek to permit employers to vary employees' terms and conditions unilaterally. In this case, the Claimants' did not argue the effect Asda's actions had on the implied duty of trust and confidence. However in Asda's favour was the significant number of employees who accepted the harmonisation.

Although, this is case was adjudicated in the UK, such cases may have persuasive authority in Ireland.

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